Question

In: Accounting

The adjusted trial balance is prepared


The adjusted trial balance is prepared 

 a. to determine whether the balance sheet is in balance. 

 b. to verify the equality of total debit and credit balances. 

 c. to determine the net income or loss. 

 d. for all of these reasons.

Solutions

Expert Solution

The income statement is prepared to determine the net income or loss. The adjusted trial balance is prepared before the balance sheet. Thus balance sheet will be balanced or not can be determined post preparing the balance sheet itself.

As per the double entry system, each and every transaction has 2 aspect. One the receiving aspect and other the giving aspect. Thus the transaction are analysed into a debit or a receiving aspect and a credit or a giving aspect. The transaction are balanced by recording of the 2 aspect. Therefore the total of debit should always be equal to the total of credit. A statement is prepares to show whether the 2 totals are equal or not. This statement is called the trial balance. An unadjusted or adjusted trial balance is prepared to show that the total debit is equal to total credit.

Answer: b

ekkarill92 answered 2 years ago
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